The poor motivation of store manager level at pizza hut vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Dinh Viet Hien THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City - 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Dinh Viet Hien THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr Nguyen Phong Nguyen Ho Chi Minh City - 2017 SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION The thesis proposal title: THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM Student Name: Dinh Viet Hien Supervisor: Dr Nguyen Phong Nguyen General comments:  Remarks on the student’s attitude: …………………………………………………………………………… ……………………………………………………………………………  Remarks on the assignment’s academic quality: …………………………………………………………………………… …………………………………………………………………………… Overall assessment:  Meet requirement for submitting  Not meet requirement for submitting Other remarks:  Did the student follow the report schedule? Yes   Other…………………………  The Turnitin plagiarism percentage: Supervisor’s signature No Table of Content Executive Summary 1 Background 1.1 Company background 1.2 Symptom 1.2.1 Symptom Analysis 1.2.2 The Importance of Symptom 1.3 Methodology 1.3.1 Qualitative Research 1.3.2 Quantitative Research 1.4 Initial Cause – Effect Map 10 1.5 Updated Cause – Effect Map 14 1.6 Central Problem Validation 18 Problem Justification 22 2.1 Problem Definition 22 2.2 Problem Existence 22 2.3 Problem Importance 25 Causes Validation and Solutions 26 3.1 The Real Causes of Central Problem List 26 3.2 Central Cause Validation 27 3.3 The Set of Alternative Solutions 30 3.3.1 The Frist Solution – Employee Recognition Workshop 30 3.3.2 The Second Solution – Recognition Gift Program 33 Appendices 36 References 52 Executive Summary Employee’s turnover rate is one of business challenge in organizations The high turnover rate has negative impacts on business performance such as more expenses to recruiting, increasing people cost, bad company reputation, reducing revenue as well profit and so on In Pizza Hut Vietnam (PHV), the turnover rate of store manager level has increased significantly from 2014 This rate is non-stopped increasing with 17.2% at June 2017 that is highest since PHV join to food and beverage market in Vietnam in 2007 This leads to PHV’s low performance in terms of key performance indicators in consecutive three year such as decreased balance score card, unstandardized customer satisfaction and increased people cost for recruiting and training Through this research, some potential problems of turnover rate were pointed out such as uncompetitive compensation package, unavailable career development opportunity, job stress and poor leadership One of these potential problems is poor job motivation that has been argued as a central problem of high turnover rate at store manager level at Pizza Hut Vietnam Ltd., Poor job motivation in this researcher is presented in terms of ineffective supporting and coaching as well as weak recognition and poor communication The importance of job motivation improvement also demonstrated through exploring its consequences to individual and organizational performance 1|Page Background 1.1 Company background Pizza Hut is one of brand franchising from American YUM! Brand It is the best restaurant chain with numbers of stores as well as sales revenue on over the world Pizza Hut is well-known with traditional pizzas following American style along with auxiliary products as pasta, fired chicken wing and so on to serve diversified customer’s needs Besides, Pizza Hut has been operated by standardized policies and procedures to maintain high quality of products and service Vietnam’s economy has grown rapidly since the country has implemented the market economy and the opening-up policy In alignment with globalization and internationalization, social conditions also have some changes One of these changes is Vietnamese’s eating habits With the entrance and dramatic development of Western style fast food in Vietnam, local Vietnamese have more choice for eating out It’s a fact that Vietnamese, nowadays, have a tendency for gathering and eating out together With a large and young population (Figure 1), Vietnam is perceived as a potential market for restaurant business developers Brands such as KFC, Pizza Hut, Lotteria, and Jollibee have been pioneers in the Vietnamese market Pizza Hut developed in Vietnam by International Food & Beverage Holdings (Vietnam) and Jardine Restaurant Group – JRG (Hong Kong) in 2007 as one of franchises from Yum! Brands, Inc (Figure 1: Large Youthful Population, Vietnam Population Organization, 2016) Large Youthful Population 19.0% 16.3% 16.4% 16.3% 13.2% 10.2% 4.8% 00-09 years 10-19 years 20-29 years 30-39 years 40-49 years 50-59 years 60-69 years 3.8% 70+ years This is the world’s largest restaurant company in terms of system restaurants with over thirty nine thousand restaurants in more than one hundreds thirty countries and territories The Company's restaurant brands – KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican-style food categories In January 2011, JRG has taken ownership and fully operated PHV With its strong brand and powerful financial capability, PHV has been leading the pizza market segment in the domestic fast food market (Figure 2) In December 2014, the chain has had totally fifty stores in Hanoi, Ho Chi Minh City and other provinces The Company’s vision is to be the leading pizza restaurant chain in Vietnam offering the best pizza at affordable prices and great services in a warm, friendly and comfortable environment At the presence, Pizza Hut Vietnam (PHV) located with more than 57 stores and more than 2,200 employees in nationwide (Figure 2: Pizza Hut Vietnam leads the CDR market in store count, APM PHV 2014) 1.2 Symptom 1.2.1 Symptom Analysis The employee’s turnover rate was defined as how many new employees were hired to replace the resigned staff (1) According to this definition, turnover rate only was counted when the replacement was successful due to hiring of new employees Chikwe (2) has another definition when employee’s turnover rate can be briefly described as how fast the employers recruit and lose employees However, the above definitions have not yet reflected gap of numbers of resigned employees and to be hired new ones in case replacement and resignation employees amount are not approximate Henry (3) defined the employee’s turnover rate to be the ratio of the numbers of organizational members who left during the period being considered divided by the average numbers of people in that organization during the period In practical, this rate is calculated basing on different principles to serve business needs of each organization such as voluntary turnover, involuntary, retirement, internal transfers In PHV, the employee’s turnover rate has been calculated by the numbers of resigned employees who had the employment length at least seven days from on boarding date divided to total of employees in the same a period and level ��������′� ������� ���� = employees) A (N umbers of resi gned B (Total of employees) Including: A = Leaving date – Service started date +1 (It is only counted when it is great than or equal to seven days) B = Total of employees at times the turnover rate to be calculated From 2014, PHV has faced with the high turnover rate of store managers The PHV’s headcount report showed that the turnover rate of store managers have increased from 18.4% of 2014 to 27.5% of 2016 and 17.2% of June 2017 PHV Turnover Rate 71.9% 64.6% 61.9% 31.2% 27.5% 24.6% 18.4% 17.2% 2014 2015 Store Manager 2016 Team Member Jun-17 PHV Turnover Rate Comparation - Store Manager Level 27.5% 24.6% 20.6% 19.8% 18.4% 15.2% 14.8% 6.8% 2014 Pizza Hut Starbuck The Pizza Company 7.1% 2015 2016 This report also analyzed about this rate and only focuses on store managers who have from four years working experience in PHV They have much experience not only technical skills but also management skills to operate stores in order to achieve sales targets With current career roadmap in PHV, a store manager spends at least 05 years to perform well and to be promoted to store manager (from entry level as team member to store manager) Therefore, PHV expenses many investments to develop store managers who have full capability to handle all tasks in store On other hand, store managers in PHV were approached by competitors Through the exit interviews and surveys to be conducted by the HR Department, these reports showed that almost the store managers who left PHV and joined competitors 36.17% of the resigned store managers have worked for direct competitors (Direct competitors are defined as brands have the same products and service with Pizza Hut as The Pizza Company, Domino, Pizza 4P, Al-Freshco…) 51.06% have worked for indirect competitors (Indirect competitors are defined as brands run business in Food & Beverage industry such as KFC, Lotteria, Jolibee, Mc.Donald, Circle K, Family Mart…) 1.2.2 The Importance of Symptom The negative impacts of the high turnover rate are reflected by key performance indicators from 2015 to 2017 such as CER, CMS, GES and BSC 94% 92% 89% Standard - 100% 89% 80% 85% 68% 75% 72% 62% 62% 65% 2015 2016 2017 CER CMS GES BSC  CER – Champs Excellent Review: This is standard about compliance with daily product process in store  CMS – Champs Management System: This is standard to control and maintain entire system in store such as machine, warehouse, and facility  GES – Guest Experience Survey: This is standard about customer service to be surveyed by unnamed customer to experience service in store and evaluate  BSC – Balance Score Card: This is standard about sales and profit in store basing calculates revenue, cost and other expense For the last one, I think it is not too serious because I was just promoted Mr Hien: more than year I think if I can performance well, I will have salary review As you shared I can see that the first and second reason is important with Ms Trang: you than the last one Yes I think I cannot continue to work During around years, I would try the best to improve but it is not worth If I continue, everything will be worse Mr Hien: When you make resigned decision? I think about it within 02 months before submitting resignation form to Ms Trang: manager and HR Department Although I have not yet another offer so far But I think that I should stop here before I am out of control everything Mr Hien: Do you share these reasons to your line manager to understanding each other for improvement? Since I feel something wrong in communication between us I am Ms Trang: proactive to meet and discuss with my manager but after short time everything is back I tried at least times but I feel it is unsuccessful and decide to give up In this time, I only come and inform that I will leave Mr Hien: Does your line manager convince you stay back PHV? She also said that I should consider and back to confirm after week She Ms Trang: also wants to listen my expectations for open discussion But I think that she is not honest to keep me Therefore, I made decision to leave after week and she did sign-off Mr Hien: When you leave? Ms Trang: Around 02 weeks left Mr Hien: What is your plan after leaving? Ms Trang: Currently, I want to release and refresh myself before seeking for a new job Honestly, I also get some interview invitations for new opportunities I am considering Mr Hien: In case, if PHV wants to rehire you, you agree? Actually, I will back PHV in case if I am transferred to work under another Ms Trang: manager At this time, I want to rest a short time to balance as well as recover myself to next steps Mr Hien: Ms Trang: I see Okie Trang, I am sincere to thank you so much for your sharing I hope that you feel happy with your decision and good luck to you Thanks Hien for listening See you around 2.3 Transcript Interviewer: Dinh Viet Hien Interviewee: Lac Thi Thuy Anh Age: 29 Position: Store Manager – PHV Ngo Gia Tu Length of Service: years Year of Leaving 2016 Time: 09:00 – 11:00 am Date: August 05, 2017 Location: Coffee Shop Good morning Lac Anh! Long time to no see you How are you? Fine, Hien! How about you? So far so good How long did you leave PHV? I remember the last time to see you in communication Right, Hien! I leave PHV in October last year It’s around 11 months so far As discussed via phone, currently I am conducting a project to discover about reasons of high att Sure, Hien! Today I accept your invitation; it means that I am ready to share all information in y Thank you so much Before leaving, I know you act a role as store manager in PHV Ngo Gia Tu Cou Actually, I was store manager in PHV Nguyen Van Thu, District 12 Ms Anh: Mr Hien: around my store had the lowest sales volume in PHV restaurant chain But I want years to move back near my house, so I accept to transfer to this store But, I before am proud of my achievement after months I pushed sales volume up transfer top in area At that time, my area has stores Until I leave, my store ring to still remains in top quarterly PHV Woa! I not understand with big achievement like that, why you Ngo leave? Gia Tu At this time, although I got big achievement, but I am not recognized by When I Area Coach I remember one time, in monthly management meeting; each took area will recognize the best store manager in area Instead of recognizing over on the meeting, my manager gives recognition card after meeting I really PHV feel hurt in this situation During I worked in PHV Ngo Gia Tu, each store Ngo visiting, my manger always find out mistakes in store but not encourage or Gia Tu, recognize which I achieved Mr Hien: How long did it happen? Until I transfer to PHV Ngo Gia Tu, at least in first 03 months, my Ms Anh: manager also take care me about challenges in store but then this is less than as I said Mr Hien: Besides this reason, What else are your reasons to make leaving decision? I am not clear about my career ladder in future As you knew, my next step is Area Coach position But at that time, there is enough headcount of Area Coach I can not stay in this level because I worked at PHV around years Ms Anh: I need a clear career path Additionally, I think my salary is not worth with my achievement In salary review cycle in middle 2016, my salary increase 7% while my performance is good I feel unfair I am so disappointed because I think that my contributions are not recognized Mr Hien: How long you think leaving decision and make it happen? Actually, as soon I get information about salary review, I am demotivated strongly and think about Do you have any discussion with my manager to say about this? Yes, of course I did discuss and presented my expectation with him But, his explanation cannot c This means that you submitted resignation as at this time Yes But my manager also convinces me and proposes to his line manager to find solution But afer Afer 11 months of leaving, if PHV want to rehire you, you agree? Actually, if this happen at this context Look great to hear from you! Do you have any comments for me? I think that’s all about reasons of Ok! Thanks for your time as well as sharing Hope to see you around Good luck to you! Ok! You’re welcome! 2.4 Transcript Interviewer: Dinh Viet Hien Interviewee: Hoang Hong Lien Age: 28 Position: Store Manager – PHV Maximark 3/2 Length of Service: years Year of Leaving 2015 Time: 02:00 – 02:30 pm Date: August 06, 2017 Location: Coffee Shop Mr Hien: Hi Lien Thank for your coming Long time to no see you How are you? Ms Lien: Hi Hien Lien is fine How about you? Mr Hien: I’m good Where are you working now? Ms Lien: Currently, I am working at Red Sun Corporation Mr Hien: How long have you worked here? Ms Lien: I have worked here around 18 months so far Ok Lien As discussed in advance via phone, today I want to see you as a Mr Hien: conversation about your leaving at PHV You are the last one whom I have interview to find out reasons on this Ms Lien: Whom you interviewed? Mr Hien: I did interview Mr Thai, Ms Trang and Ms Anh Ms Lien: Ok Hien Mr Hien: Ms Lien: During employment in PHV, what are your challenges as a role of store manager? Firstly, it is revenue Each store has target sales monthly I always have to face difficulties to meet target My store is located in small So, sales revenue only increase at weekend or holidays while sales target is high Secondly, because the actual sales is lower than sales target, I must reduce people cost frequently to minimize people cost This leads to shortage of staff in a shift and increase workload Finally, I have no much supporting from line manager to help me advice solutions to solve issues in store as well as encouragements Mr Hien: Are they reasons to let you make leaving decision? Actually, at that time I have some personal issues to solve Therefore, I made decisions quickly to leave Honestly, if there are no personal issues, I Ms Lien: also will make leaving decision because I feel so tired for long time but everything cannot change The above challenges make me lose motivation to work Mr Hien: Three challenges which you mentioned, are difficulties of store in mall, right? I’m not sure Maybe, my store was located in old mall and has no many Ms Lien: customers For my observation, some new malls have high sales as Aeon Mall Mr Hien: Do you have any discussions with your line manager to find solutions on this? I also have many conversations about these issues However, everything cannot change I tried the best to advertise, marketing to expand trade zone Ms Lien: but it is not much effective Additionally, my line manager also has feedbacks for direction of BOD about store closing and move to another location But until I leave, it has not happened yet It is about years Mr Hien: Ms Lien: Currently, your store was closed Do you know it? Yes But it just has been closed recently around months It means that if I stay back at PHV, I still have to wait at least more than one year I cannot I see, Lien What else’s about your leaving decision? In my situation, which I really need, is encouragement from my line manager However, he is s I see, Lien Currently, how about your job? So far so good Any company has also issues But my important thing is worked with my passion a In case, if PHV want to rehire you, you agree? In my point of view, I will not come back the previous company I want to try the new challenges as Do you have anything else to share with me? Just enough, Hien! Ok, Lien Once again thank you so much for kind cooperation Good luck to you on new journey Ho No problem, Hien Good luck to you! Job Motivation Survey Please read each question and possible responses carefully, then circle your answer (1 to 5) COMMUNICATION My manager keeps me informed about important issues Strongly disagree: :Strongly agree My manager is willing to listen to my ideas Strongly disagree: :Strongly agree There is good communication between me and my manager Strongly disagree: :Strongly agree My manager try to improve communication in all directions Strongly disagree: :Strongly agree I know clearly what I is expected from my manager Strongly disagree: :Strongly agree I have enough information to perform my tasks in the best My manager communicates to me frequently and honestly about all issues in store I am satisfied with communication between me and my manager Strongly disagree: :Strongly agree Strongly disagree: :Strongly agree Strongly disagree: :Strongly agree RECOGNITION My manager creates a great recognition culture in my restaurant Strongly disagree: :Strongly agree 10 When I am recognized in my restaurant everyone knows about it Strongly disagree: :Strongly agree 11 My manager knows how to encourage me to develop my best abilities Strongly disagree: :Strongly agree 12 My contributions is rewarded by recognition from my manager Strongly disagree: :Strongly agree 13 My manager recognized my achievements even small things Strongly disagree: :Strongly agree 14 The recognition is adequate with my contribution Strongly disagree: :Strongly agree 15 The recognition is fair to others in my organization Strongly disagree: :Strongly agree 16 I am satisfied with recognitions that is received by my manager Strongly disagree: :Strongly agree TRAINING & COACHING 17 My manager is willing to advice when I have any questions or need helps My manager always supports to provide to me relevant coaching Strongly disagree: :Strongly agree 18 Strongly disagree: :Strongly agree 19 My manger assist me periodically to identify my training needs Strongly disagree: :Strongly agree 20 I receive the useful coaching for my job from my manager Strongly disagree: :Strongly agree 21 My manager use the relevant approaching ways to coach me Strongly disagree: :Strongly agree 22 I am provided necessary skills through coaching of my manager Strongly disagree: :Strongly agree 23 My manager coaches to help me develop comprehensively Strongly disagree: :Strongly agree 24 I am satisfied with ways of coaching and training from my manager Strongly disagree: :Strongly agree IN GENERAL 25 For me, the most important job motivation factor is good communication between me and my manager Strongly disagree: :Strongly agree 26 For me, the most important job motivation factor is recognition from my manager Strongly disagree: :Strongly agree 27 For me, the most important job motivation factor is training and coaching from my manager Strongly disagree: :Strongly agree PERSONAL INFORMATION Gender Age Length of service Male □ Female □ 18-22 □ 22-30 □ Above 30 □ Under – year Above year – years □ □ Above years – years □ Above years □ Thank you so much for your kind support The above information is only served to the research purpose and will be kept confidentially Reference Lee F-H, Lee T-Z, Wu W-Y The relationship between human resource management practices, business strategy and firm performance: evidence from steel industry in Taiwan The International journal of human resource management 2010;21(9):1351-72 Chikwe AC THE IMPACT OF EMPLOYEE TURNOVER: THE CASE OF LEISURE, TOURISM AND HOSPITALITY INDUSTRY Consortium Journal of Hospitality & Tourism 2009;14(1) Ongori H A review of the literature on employee turnover 2007 Mark S, Philip L, Adrian T Research methods for business students Prentice Hall; 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SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION The thesis proposal title: THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM Student...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Dinh Viet Hien THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM MASTER OF BUSINESS ADMINISTRATION... job motivation that has been argued as a central problem of high turnover rate at store manager level at Pizza Hut Vietnam Ltd., Poor job motivation in this researcher is presented in terms of